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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Stock Farmer who wrote (48100)	10/19/2001 12:08:34 PM
From: gdichaz	Respond to of 54805

John: Your bottom line (literally) is worth pondering at this point in time, no? viz: <<Silver lining: as long as the future looks dim, then in a kind of perverse kind of way, we should expect any Gorillas that emerge today to attract above average rates of return!>> I was trying to suggest something similar in my post to Judith. Best. Cha2

To: Stock Farmer who wrote (48100)	10/19/2001 12:37:13 PM
From: Pirah Naman	Read Replies (1) \| Respond to of 54805

John: In the pleasant world of homogeneous behavior, one can apply Vanilla rules of thumb to an existing business and ballpark future profits; then apply a Vanilla estimate of future-risk; then discount to present value. Which for a given company will result in a Vanilla valuation. Without question, if one applies Vanilla criteria to the evaluation of a Gorilla then yes it will be undervalued. I have two points on this. I think you meant to say that applying such criteria to a Gorilla will make it seem overvalued. However, all four "silverbacks" I have seen undervalued in the mid to late 90s. Now maybe I have misinterpreted you, in which case this point isn't for you. Also, maybe what you term vanilla doesn't apply to a method I might use. Anyway... The second point is that most people participating in the equity markets do not perform any sort of valuation. If they are not performing any valuation, then if the GGs thesis were true, i.e., the market always undervalues and underestimates Gorillas, then it would be better stated as "a pricing inefficiency exists with most company's stocks, and that inefficiency tends to be more pronounced for Gorillas." Now it may be true that generally that inefficiency favors the Gorilla investor, but if people are not acting on the basis of valuation, then they can and at times will be just as "irrational" in their pricing on the optimistic side as they (supposedly usually) are on the pessimistic side. As for the methods, a couple more points. One could merely wait until a Gorilla can be positively identified before investing. While one would miss out on the early thrill ride, one would still have the opportunity for above average returns with reduced risk - a central concept to the GG. Conversely, and this supports what Cha2 has been bringing up, if one chooses to invest before a Gorilla can be positively identified, a basket reduces the risk. This could be demonstrated mathematically or simply reasoned out. However, perhaps in search of those "stellar returns" that concept has been abandoned in favor of trying to pick the Gorilla winner early. Months ago this was prominent on this thread, with debates/discussions raging over how some markets "have" to play out. First, they don't have to play out any certain way, despite the writings of any seer. Second, if they really did have to play out a certain way, that would probably be sufficient to substantially reduce pricing inefficiencies and thus the potential for the sought after stellar returns. This method does conflict with GG principles, which are very much reactive as opposed to anticipatory. - Pirah

To: Stock Farmer who wrote (48100)	10/19/2001 3:08:14 PM
From: JHP	Respond to of 54805

congratulations on your cool post! regards john

To: Stock Farmer who wrote (48100)	10/19/2001 4:18:39 PM
From: Eric L	Read Replies (1) \| Respond to of 54805

John, << Don - that was a great post. >> Agreed and thanks, Don. Good post yourself, but I disagree with one comment you made "Can we identify Gorillas early enough? So far, this thread hasn't had too spectacular a track record. Individuals perhaps. But the thread as a collective has not." The fact that not many Gorillas have been picked by this thread is in itself a testimony to the fact that - plain and simple - Gorilla's are very rare beasts. Lots of Gorilla candidates have been put forth, beyond the ones that were known when Moore first published the "Gorilla Game". We have sliced em and diced em and we'll continue to do so. Very few Gorilla's have been picked, and that is it should be. I don't think we've missed many because there aren't many to miss. It is always a pleasure to see "individuals" who specialize in a particular Gorilla (or King) wannabe and bring it to our attention and champion it. "Individuals" are doing there job very well and the "collective" is doing its job extremely well, IMO. - Eric -

To: Stock Farmer who wrote (48100)	10/19/2001 6:22:46 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

There are three factors which determine the price of any stock: (a) time value of money (b) estimated future profits (c) future-risk Not to mention (d) what the market happens to think of it at the moment. I don't say this to be flip, but to point out that there are frequently very significant disconnects between what the price should be and what it actually is and that these disconnects can persist over medium long terms. And before a Gorilla is identifiable amongst the other shiny pebbles, it is hard to argue that it deserves anything but Vanilla valuation I suppose this depends on what you include within Vanilla. To me, a shiny pebble ... assuming we are talking here of a company for which serious gorilla potential can be argued, not just some story stock ... is different from ordinary stocks in much the same way as a gorilla, but differs from the gorilla in the level of risk. This could mean that using Vanilla valuation (VV?) would be advised, but I don't think it is an accurate reflection of the company. Think of the projection on which the valuation is based as being a pair of diverging lines representing the upper and lower confidence bonds of our projection. The shiny pebble still has a central tendency like that of a gorilla, but the bands diverge much more rapidly. This is particularly significant in relationship to the "basket" approach in which one may have a relatively high level of confidence that one of the group will attain gorillahood, just not which one among the basket. It is not as valuable in advance as we might want it to be. Or more to the point as it needs to be in order to be successful. Based on? A gorilla that has entered into tornado still has a huge amount of growth ahead of it. Moreover, I think the consensus here is still that investing in silverbacks is perfectly reasonable (outside of superbubbles, at least), just not as wildly rewarding as catching the wave early. Can we identify Gorillas early enough? So far, this thread hasn't had too spectacular a track record. Individuals perhaps. But the thread as a collective has not. How has it been unsuccessful? What companies on which we had a consensus of gorillahood has it proven not to be the case? What gorillas did we examine and inappropriately dismiss. FWIW, I don't think that we need to count only absolute hits and misses here since having a mixed consensus in the thread can well be indicative of a company that is not a pure case or one whose market has yet to fully resolve. I would actually reverse your judgments -- some individuals have made significant mistakes, but the thread as a whole has shown good understanding. Note that the composition of the GKI is formed by open voting, not by consensus, so it can be expected to include companies which a subset of people think is a gorilla, but where thread consensus either disagrees or at least thinks it is premature. What I am saying is that when repeated often enough and by enough people, the practice of Gorilla Gaming should attract enough spectacular failures so that in the end one's net returns turn out to be average!!! Any given theory can be wrongly or poorly applied. That doesn't make the theory wrong or poor. And Moore's book has been out for a few years now. It's not exactly a secret. True, but as we have discussed here before, it seems unlikely that any intrinsically long term strategy will ever become broadly popular in this world of instant gratification.

To: Stock Farmer who wrote (48100)	10/21/2001 11:03:27 PM
From: tekboy	Read Replies (2) \| Respond to of 54805

nice string of Cool Posts, JS... better watch out or you'll get Merlin's goat agin... tekboy/Ares@hehasn'thadaCPinalooooongtime.hee

To: Stock Farmer who wrote (48100)	10/21/2001 11:09:16 PM
From: ynot	Read Replies (1) \| Respond to of 54805

better than cool post! moore falls into the trap of making a decent observation, building a consulting business around it, and then believing that the markets will always follow his rules it shouldn't surprise anyone that the real gorilla is moore's business and the ability to sell to anyone slightly 'smarter' than an idiot an observation that has been extended well beyond the life of the original pattern, imho an idiot would ask why the rules don't seem to fit, but then maybe i should say that this idiot did! give it up moore, be honest, people actually depend on you. thanks for your keen insight john, cheers! ynot :)

To: Stock Farmer who wrote (48100)	10/22/2001 12:40:55 AM
From: Apollo	Read Replies (1) \| Respond to of 54805

Great posts over the past few days, especially by Don Mosher, and also by John Shannon, and by Century Man..... Can we identify Gorillas early enough? So far, this thread hasn't had too spectacular a track record. Individuals perhaps. But the thread as a collective has not. No fair! Gorillas have to tornado in sales of their product or service. To do so, clients have to purchase the product or service. The years 2000 & 2001 have been dreadful years for technology purchases, and our Tech portfolios reflect the impact on our equities' earnings over the past 1 3/4 years. The thread successfully identified Qualcomm and Siebel before the General Market did. We've identified a number of gorilla candidates, and are watching them very closely. Macroeconomic collapse has suspended any chance for young gorillas to emerge at this particular point in time. The time to determine whether the thread has been closely watching the Wrong gorilla candidates, or doesn't have a good track record, is when the macroeconomics are favorable, and allow quality companies with great products a chance to open up and really run. That's when the thoroughbreds will show their stuff. Right now, even the Triple Crown winners are stuck in the muck, and still at the gate. Apollo, (not Thucydides) <vbg>

To: Stock Farmer who wrote (48100)	10/22/2001 12:30:45 PM
From: Knighty Tin	Respond to of 54805

John, As Chuck E. Weiss sang, that post was "Extremely Cool." I have long wondered why so few people have noted the similarities of Gorilla Gaming to other systems in the past. Most notably: One decision stocks, nifty fifty stocks, and core stocks. The odd thing is, all of these systems can work. All you have to do is be such a superior analyst that you can find that one stock that will go up forever. I've bought thousands of stocks over many decades and found one one decision stock: Medtronic. That is too tough a set of odds for me to buck with regularity. So, Nifty Fifty is easier. I have often been able to find 50 decent stocks that outperform on average. But the trick is to find your own 50, not the herd's. Another pretty tough game. Core stocks are just a silly concept. Gorilla gaming may be derived from these other former judas goat theories, but it has superior terminology with its kings and tornadoes and all the other flapdoodle. In other words, it is more fun than boring coring. <g>